The Chicago Syndicate: Prior to Mob Hit, Allen Dorfman Built Financial Empire through Teamsters #Solidarity

Friday, January 21, 1983

Prior to Mob Hit, Allen Dorfman Built Financial Empire through Teamsters #Solidarity

Allen M. Dorfman, the Chicago insurance executive who was slain yesterday in a hotel parking lot near Chicago, built a huge financial empire through close associations with leaders of the teamster's union that began more than 30 years ago.

Mr. Dorfman, who was 59 years old, went into the insurance business in 1949 to handle the health and welfare funds of one of the major branches of the International Brotherhood of Teamsters. Over the years he received millions in fees and commissions from the union.

His empire included insurance companies, condominium developments, resorts and other projects, and he had homes in suburban Chicago and Wisconsin, Florida and California.

Mr. Dorfman was convicted last month, along with the president of the teamsters' union, Roy L. Williams, and three others on Federal charges of conspiring to bribe Senator Howard W. Cannon, Democrat of Nevada, to delay or defeat a bill to deregulate rates for trucking freight. The measure eventually passed. Senator Cannon was not indicted in the case.

Mr. Dorfman had been free, pending sentencing, on a $5 million bond. He faced a maximum sentence of 55 years and a fine of $29,000. Forty Federal agents worked on the case for 14 months and recorded more than 2,000 reels of conversations. The operation was described by Federal investigators as the most elaborate in the history of electronic surveillance.

The Federal authorities named the multimillion-dollar effort Operation Pendorf, for Penetrate Dorfman, and said they hoped to prove links between Mr. Dorfman, the teamsters' pension fund and crime figures in Chicago and Las Vegas, Nev.

Mr. Dorfman had been a subject of extensive scrutiny by Federal agencies for at least 10 years. In 1972 he was convicted on a Federal charge of conspiring to facilitate a loan from the teamsters' Central States Pension Fund in return for a kickback of $55,000 and served nine months in jail.

Mr. Dorfman was indicted in three other cases, including one involving organized crime figures and a loan from the pension fund, but he was acquitted in each.

After his conviction in 1972, Mr. Dorfman was forced to relinquish his official relationship with the pension fund. However, through insurance companies that he controlled in Chicago, he continued to insure some of the fund's borrowers and also to process claims for the union's related health and welfare fund.

Mr. Dorfman was introduced in 1949 to James R. Hoffa, who later became the teamster president and subsequently disappeared in 1975. The introduction was made by Mr. Dorfman's stepfather, Paul (Red) Dorfman, a former prizefighter, associate of Al Capone and the head of Waste Handlers Union Local 20467 in Chicago.

At that time Mr. Hoffa was attempting to expand his base from Detroit. He reportedly turned to Paul Dorfman and his crime connections for assistance in Chicago.

In return, Mr. Hoffa saw to it that the teamsters' insurance business that he controlled went to a company that had been newly set up by Allen Dorfman and his mother, Rose.

Mr. Hoffa developed a close relationship with Paul and Allen Dorfman. Eventually, Mr. Hoffa and Allen Dorfman became partners in several businesses, including an oil property in North Dakota, a Wisconsin resort, an Ohio race track and a New York real-estate concern.

In the 1950's alone, according to Robert F. Kennedy, who later became United States Attorney General, Mr. Dorfman's insurance agency handled the premiums on nearly $100 million in teamsters' business. By 1978 Mr. Dorfman was getting $6.1 million a year for handling health and welfare alone.

Over the decade Mr. Hoffa ran the union, ending in 1967, when he went to prison for jury tampering and stealing union funds, Mr. Dorfman was regarded as the second most powerful man associated with the teamsters; he was said to have maintained that position when Frank E. Fitzsimmons took over from Mr. Hoffa in 1967.

When Mr. Hoffa went to prison, he was quoted as saying, ''When Dorfman speaks, he speaks for me.'' Mr. Dorfman graduated from Marshall High School on the West Side of Chicago. He attended the University of Illinois, but dropped out to enlist in the Marines and won a silver star at the battle of Iwo Jima.

Immediately before he started his first insurance company with his mother, he had been teaching physical education at the university. Five years later the teamsters' insurance business had made him a millionaire.

In addition his mother, Mr. Dorfman's survivors include his wife, Lynn;, three sons, James, Michael and David, and a daughter, Kim.

Thanks to Joseph B. Treaster


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